Aviation Sustainability and the Environment, CAPA 11-Jun-2020

Austrian Airlines Receives Financial Aid from the Federal Government and Lufthansa.

• EUR 150 million in state aid to cover coronavirus-related losses; ecological requirements imposed
• EUR 150 million injection of equity capital by Lufthansa
• EUR 300 million as bank loans to be repaid by 2026
• Rescue package designed to ensure maintaining flight hub to CEE and long-haul flight connections

The Austrian Federal Government, Lufthansa and Austrian Airlines have reached an agreement on the cornerstones of a EUR 600 millioncoronavirus rescue package for the national network carrier Austrian Airlines. The financial assistance is designed to support efforts to sustainably safeguard Vienna as an aviation hub in the long term, including its flight connections to Central and Eastern Europe (CEE) and to long-haul destinations. According to the Austrian Economic Chambers, EUR 2.7 billion in domestic value creation, 17,500 jobs and EUR1 billion in taxes and duties are linked to Austrian Airlines and its Vienna flight hub.

The Republic of Austria will contribute EUR 150 million in financial assistance to cover the losses incurred as a result of the COVID-19 crisis. In return, the Austrian Federal Government has received long-term, binding commitments to the Vienna aviation hub linked to strict ecological requirements. The entire financing package is dependent on state aid for Lufthansa in Germany, the approval of all corporate bodies and the consent of the EU Commission.

"Austrian Airlines has been and is a fundamental part of the multi-hub strategy pursued by Lufthansa Group. Thanks to this rescue package in combination with the improved framework conditions of the Austrian aviation system partners, we see ourselves in a position to rebuild the flight hub in Vienna after the crisis and connect Austria with important destinations in Europe and throughout the world", states Carsten Spohr, Chief Executive Officer of Lufthansa Group.

The location requirements aim to reposition Austrian Airlines in the aftermath of the COVID-19 crisis and generate sufficient funds to pay back the loans. The airline will attach particular importance to the environment and sustainability in its ongoing fleet modernization drive.

The following requirements with a focus on sustainability were specified, amongst others:

• Austrian Airlines will shift passenger traffic to the railways on short-haul flights inasmuch as an adequate infrastructure is available and direct accessibility to Vienna Airport is ensured based on a travel time of considerably less than three hours. However, the objective is also to make sure that the airports in Austria's provincial capitals continue to be connected to a Lufthansa flight hub.
• CO₂ emissions within Austria should be cut in half by 2030.
• Austrian Airlines has pledged to increase jet fuel efficiency by 1.5 percent annually and to reduce average CO₂ emissions per 100 passenger kilometers of the entire Austrian Airlines fleet from 9.55 kg to 8.5 kg by 2030.
• CO₂ emissions are to be reduced by 30 percent by the year 2030 from the comparable level of 2005.

The state holding company Austrian Holdings AG (ÖBAG) has the possibility to appoint two people to serve on the Managing Board of Österreichische Luftverkehrs-Privatstiftung (ÖLP), the private foundation which holds a majority stake in Austrian Airlines (via the holding company Österreichische Luftverkehrs-Holding) in order to monitor compliance with all the conditions laid down in the agreement. Moreover, one of these two individuals will also serve on the Supervisory Board of Austrian Airlines AG.

Furthermore, a bi-annual dialogue on Austria as an aviation location including all relevant stakeholders is planned. The objective of this aviation dialogue is the ongoing further development and improvement of underlying conditions as a means of strengthening the flight hub at Vienna Airport.

Austrian Airlines originally reported liquidity requirements amounting to EUR 767 million to the COVID-19 financing agency of the AustrianFederal Government (COVID19-Finanzierungsagentur des Bundes GmbH, COFAG in short). The earlier restart of flight operations and the successful implementation of measures by the airline's management to secure liquidity serve as the basis for the lower amount of EUR600 million in required financing. This sum was also confirmed by the auditor PwC.

EUR 300 million will be made available as loans granted via bank financing. Another EUR 300 million provided as state aid and by Lufthansa will strengthen the airline's equity capital. Not only is the repayment of the bank financing secured in this manner, but the ability to make medium-term investments in sustainable technologies will be ensured. In turn, this will safeguard the continued existence of Austrian Airlines as a systemically relevant partner for the Vienna aviation hub.

The bank loans totaling EUR 300 million are to be made available by an Austrian banking consortium consisting of Erste Group, Raiffeisenbank International, BAWAG and possibly further banks, with the Erste Group also serving as the overall coordinator. A guarantee for 90 percent of the loans will be assumed by the Republic of Austria via COFAG after the required evaluation steps are carried out and all necessary approvals have been granted.

Another significant part of the coronavirus rescue package will come from the airline's employees. The close to 7,000 employees will make an accumulated crisis contribution of about EUR 300 million by taking salary cuts. The more than 1,000 business partners and suppliers of Austrian Airlines will also make a substantial contribution. Contract volume could be reduced by more than EUR 150 million, partially within the context of newly concluded agreements, in part also by means of renunciation.

"I am relieved and thankful that we have succeeded together in making Austrian Airlines ready for take-off again", says Austrian AirlinesCEO Alexis von Hoensbroech. "After almost three months on the ground, Austrian Airlines will lift off again and slowly ramp up its flight operations in accordance with international travel guidelines. We look forward to soon welcoming passengers on board our flights once again", he adds.

Luton Council's airport company London Luton Airport Ltd (LLAL) has today set out its ambition to make London Luton the UK's most sustainable airport over the next 20 years.

Aeroporto de Brasília constrói unidade de usina solar para produção de energia elétrica para consumo do terminal

A Inframerica, concessionária do Aeroporto de Brasília, está na fase final da construção de uma unidade de usina fotovoltaica para produção de energia de fonte solar que servirá para abastecer parte do consumo do terminal aéreo.

As obras tiveram início em janeiro deste ano e a usina deverá começar a operar em julho. Mesmo com a pandemia, o planejamento e a execução do projeto seguiu em frente com o objetivo de reduzir a pegada de carbono da operação aeroportuária com a inclusão desta nova fonte de energia limpa. A concessionária dedicou uma área de 18,3 mil metros quadrados para o empreendimento, próximo ao acesso ao aeroporto. A geração será operada pela startup japonesa Shizen Energy, que no Brasil opera sob a marca FazSol Energias Renováveis, em parceria com a empresa brasiliense de empreendimentos imobiliários Espaço Y. Espera-se que os 3.360 módulos fotovoltaicos produzam, por ano, 2 milhões kWp de energia, que suprirá 7% da demanda do Aeroporto, carga esta que seria suficiente para abastecer 1.462 casas populares, por exemplo.

"Brasília é beneficiada pela alta incidência solar e o Aeroporto possui uma vasta área aberta e sem edificações nas proximidades, situação propícia para o projeto", conta a gerente de Meio Ambiente da Inframerica, Daniella Lacerda.

A engenheira comemora o avanço e explica que a operação da usina fotovoltaica é apenas o começo da execução de alguns projetos que buscam orientar a operação do terminal aéreo brasiliense para um modelo mais sustentável. "Eu e a minha equipe trabalhamos diariamente para pensar formas de oferecer sustentabilidade para os serviços do aeroporto. A usina fotovoltaica era um sonho que conseguimos trazer para a realidade. Este é o projeto piloto de planos muito maiores que estamos galgando para o Aeroporto de Brasília", comemora.

Aeródromo Sustentável

As práticas de sustentabilidade adotadas pelo Aeroporto de Brasília foram reconhecidas na 1ª edição do Projeto Aeródromos Sustentáveis da Agência Nacional de Aviação Civil (ANAC). O terminal brasiliense conquistou o selo de Aeródromo Sustentável nível avançado, sendo um dos quatro únicos dentre os 23 aeródromos avaliados na pesquisa. Além deste selo, o terminal brasiliense também foi reconhecido, pela primeira vez, com o selo ouro no Programa Brasileiro GHG Protocol (Greenhouse Gas Protocol), que realiza a publicação de inventários de emissões de gases de efeito estufa (GEE). O Conselho Internacional de Aeroportos (ACI) também reconheceu o terminal brasiliense com a certificação internacional de controle de carbono.

Práticas ambientais no Aeroporto de Brasília

O Aeroporto de Brasília conta com uma equipe de meio ambiente responsável por todos os projetos ambientais e de sustentabilidade do terminal aéreo. Nesses 7 anos de concessão, várias iniciativas foram implementadas, representando economia de energia e de água potável, melhoria na coleta seletiva e aumento de resíduos encaminhados para reciclagem, inventário de gases de efeito estufa, dentre outras ações.

"Sustainability as the New Normal" a Vision for the Future of Tourism

To mark World Environment Day, the One Planet Sustainable Tourism Programme led by the World Tourism Organization (UNWTO) announces its new vision for global tourism- growing better, stronger, and balancing the needs of people, planet and prosperity.

The One Planet Vision for the Responsible Recovery of the Tourism Sectorbuilds on the UNWTO Global Guidelines to Restart Tourism, with the aim to emerge stronger and more sustainable from the COVID-19 crisis.

This combined effort comes at a time when several destinations around the world begin to ease restrictions on travel and mobility and the tourism sector is getting ready to resume its activity with the lessons learned from the pandemic.

UNWTO Secretary-General Zurab Pololikashvili said: "Sustainability must no longer be a niche part of tourism but must be the new norm for every part of our sector. This is one of the central elements of our Global Guidelines to Restart Tourism. It is in our hands to transform tourism and that emerging from COVID-19 becomes a turning point for sustainability."

Better, more sustainable, and resilient growth

The One Planet Vision calls for responsible recovery for the tourism sector, which is founded on sustainability, to build back better. This will underpin tourism's resilience to be better prepared for future crises. The Vision will support the development and implementation of recovery plans, which contribute to the Sustainable Development Goals (SDGs) and to the Paris Agreement.

At a time when governments and the private sector are embarking on the path to recovery, the time is right to keep advancing towards a more economically, social and environmentally sustainable tourism model.

Private sector committed to lead by example

Sabina Fluxà, Vice-Chairman and CEO Iberostar Group , a leading international Hotel and Resort company, stressed that " it is imperative to keep focused on creating a more responsible and fair way to travel", adding that "Iberostar has responded by integrating sustainability in elevated safety protocols and further committing to our circular economy policies to ensure any new waste is managed properly."

According to Delphine King, Executive Director of The Long Run, an international community of nature-based tourism businesses, "Our members collectively conserve over 20 million acres of fragile ecosystems, and none of this work has stopped despite the pandemic and tourism's pause, demonstrating where priorities lie."

James Thornton, CEO, Intrepid Travel, a leading provider of adventure travel experiences, call for committed actions and underscores that, "We believe climate action is a collective commitment to the sustainability of the entire travel industry, and the world we so love to explore".

The One Planet Vision for the Responsible Recovery of the Tourism Sector is structured around six lines of action to guide responsible tourism recovery for people, planet and prosperity, namely public health, social inclusion, biodiversity conservation, climate action, circular economy and governance and finance.

In March 2020 the International Air Transport Association (IATA) wrote to the 36-member Governing Council of the International Civil Aviation Organization (ICAO) requesting that the Council re-write the rules of ICAO's flagship Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). CORSIA requires airlines to offset their carbon emissions above the average of 2019-2020 emissions.

Citing the unexpectedly low aviation emissions due to the tragedy of the COVID-19 pandemic, which could result in an increase in offset obligations at such time as air travel emissions increase above this average level, IATA wants the ICAO Council to change the emissions baseline to 2019 only. They argue that implementing CORSIA with the 2019-2020 emissions baseline, as originally written, would impose an "inappropriate economic burden on international aviation."

The request is ironic: In an effort to lure back customers, airlines are publicly touting their commitments to reducing emissions - including to carbon offsetting. But behind the closed doors of the ICAO Council, they're pushing a re-write that would give them a free pass to escape offsetting requirements for three to five years or more, according to analyses by EDF and other experts.

The request for a hasty re-write raises an important legal question. Does the ICAO Council have the legal authority to change a decision of the ICAO Assembly? It appears that while the Council could, at the current session, recommend that the ICAO Assembly change the baseline, ICAO's Council lacks the legal authority to undertake this change itself. Below we review (a) the legal authority of the Assembly; (b) the legal authority of the Council; and (c) the legal character of the CORSIA baseline and Council's authority in light of that legal character.

A. The legal authority of ICAO's Assembly

The 1944 Chicago Convention on International Civil Aviation, in Article 43, establishes ICAO and its organs: "An organization to be named the International Civil Aviation Organization is formed by the Convention. It is made up of an Assembly, a Council, and such other bodies as may be necessary."

Powers of the Assembly. Article 49 specifies the authority of the Assembly, and includes the following provisions: "The powers and duties of the Assembly shall be to: … (c) Examine and take appropriate action on the reports of the Council and decide on any matter referred to it by the Council; … "(h) Delegate to the Council the powers and authority necessary or desirable for the discharge of the duties of the Organization and revoke or modify the delegations of authority at any time;" and "(k) Deal with any matter within the sphere of action of the Organization not specifically assigned to the Council" (emphasis added).

B. The legal authority of ICAO's Council

Powers of the Council. Article 54 specifies the authority of the Council. It states: "Mandatory functions of Council. The Council shall: … (b) Carry out the directions of the Assembly and discharge the duties and obligations which are laid on it by this Convention; … (l) Adopt, in accordance with the provisions of Chapter VI of this Convention, international standards and recommended practices; for convenience, designate them as Annexes to this Convention; and notify all contracting States of the action taken" (emphasis added).

That is, the Council must "carry out directions of the Assembly" and then adopt the standards and recommended practices that implement those directions. We now turn to whether the Assembly "directed" the Council to establish CORSA SARPs with the baseline of 2019-2020.

C. The legal nature of CORSIA's baseline

In 1997, when Parties to the UN Framework Convention on Climate Change (UNFCCC) could not decide how to allocate among themselves the greenhouse gas emissions of ships and aircraft in international transport, the UNFCCC Conference of the Parties (COP) requested the International Maritime Organization and ICAO, respectively, to address the issue.

ICAO studied the issue for over a decade. In 2013, the ICAO Assembly "Decide[d] to develop a global MBM [market-based measure] scheme for international aviation" and "Request[ed] the Council, with the support of Member States, to…make a recommendation on a global MBM scheme…and report the results of the work … for decision by the 39th Session of the Assembly." (See Resolution A38-18, paragraphs 18 and 19.)

The Council did so (see C.208.DEC.13.EN.DOCX), and thereupon, in 2016, the 190+ countries that are members of ICAO's General Assembly decided, at the 39th Session of the Assembly, to establish CORSIA (See Resolution 39-3 at paragraph 5). In paragraph 9 of the Resolution, the Assembly further decided to establish CORSIA's pilot phase; and in paragraph 11, the Assembly decided to set the baseline at the average of 2019-2020 levels. Each of these was taken by "Decision" - that is, the Resolution states that "The Assembly Decides…", as contrasted with a Recommendation, Request, or Note.

Further, in paragraph 20 of Resolution 39-3, the Assembly "Request[ed]" the Council, with the technical contribution of the Committee on Aviation Environmental Protection (CAEP), to develop the Standards and Recommended Practices (SARPs) and related guidance material to implement CORSIA. The Council - fulfilling its obligation under the Chicago Convention to "carry out directions of the Assembly" - has largely finished its work developing these SARPs, and nations and air operators are acting on them.

In taking these decisions, the Assembly effectuated a commitment made by airlines in 2009, when IATA adopted targets that included "A cap on aviation CO2 emissions from 2020 (carbon-neutral growth)."

In paragraph 9(g) of its 2016 Resolution 39-3, the Assembly further "Decide[d…that] Starting in 2022, the Council will conduct a review of the implementation of the CORSIA every three years, including its impact on the growth of international aviation, which serves as an important basis for the Council to consider whether it is necessary to make adjustments to the next phase or compliance cycle and, as appropriate, to recommend such adjustments to the Assembly for its decision." To implement this review, the Assembly in paragraph 19 of Resolution 39-3 "Decide[d] that a periodic review of the CORSIA is undertaken by the Council, for consideration by the Assembly, every three years from 2022 for the purpose referred to in paragraph 9 g) above and to contribute to the sustainable development of the international aviation sector and the effectiveness of the scheme". The Assembly further directed, in paragraph 19, that the review should cover "the scheme's market and cost impact on States and aircraft operators and on international aviation; and the functioning of the scheme's design elements;" as well as "consideration of the scheme's improvements that would support the purpose of the ParisAgreement, in particular its long-term temperature goals; and update the scheme's design elements to improve implementation, increase effectiveness, and minimize market distortion."

In paragraph 20, the Assembly "Request[ed]… the Council to oversee the functioning of the CORSIA." But the Assembly did not ask or direct Council to make, of its own accord, changes to the CORSIA provisions that the Assembly, by Decision, had established.

The Assembly affirmed the foregoing provisions at its 40th meeting in 2019. And while the Assembly in Resolution A40-19 "Request[ed] … the Council, with the technical contribution of CAEP, to update the Annex 16, Volume IV and Environmental Technical Manual, Volume IV, as appropriate," it never authorized the Council, sua sponte, to change CORSIA.

In its letter to ICAO asking for the baseline change, IATA said, "IATA recalls that Assembly Resolution A40-19 underlines the 'need to provide for safeguards in the CORSIA to ensure the sustainable development of the international aviation sector and against inappropriate economic burden on international aviation' and gives authority to the Council to 'identify means to address these issues'." However, the ICAO Resolutions establishing CORSIA actually say that the Assembly "Recalls its decision at the 39th Session on the need to provide for safeguards in the CORSIA to ensure the sustainable development of the international aviation sector and against inappropriate economic burden on international aviation, and requests the Council to decide the basis and criteria for triggering such action and identify possible means to address these issues" (emphasis added).

The Council, to date, has not published proposed bases or criteria for safeguards, nor any proposed means of addressing such issues. Further, nothing in the Resolutions supports the proposition that the Council could arrogate to itself the extraordinary power to make an end-run around the review processes specified by the Assembly to fundamentally alter what the Assembly decided in 2016 and reaffirmed in 2019.

Conclusion

The legal underpinnings of the CORSIA review structure were developed through tough negotiations at two successive Assemblies for a reason: If the 36-member Executive Council of ICAO could ignore the processes established by the Assemblies and simply alter decisions of Assemblies, that might sow doubt among non-Council members of ICAO as to the legitimacy of ICAO's decisions and processes. With the next Assembly slated for 2022, and the first deadline for participating airlines to cancel offsets required for CORSIA's Pilot Phase not until early 2025, there is ample time for the ICAO Council to follow the processes the Assembly established for reviewing and making any revisions, if needed, to CORSIA.